Canadian Dollar Soars on Soft US Data and Higher Oil Prices

The Canadian Dollar has strengthened against the US Dollar due to softer US economic data and higher oil prices. The Retail Sales report from the US Census Bureau showed a decline of 0.6% month-over-month in July, below market expectations of 0.1% growth.

Following this report, traders have reduced their bets on Federal Reserve rate hikes, with the CME FedWatch tool showing a 33.1% chance of a rate hike next month, down from 44% last week.

The Canadian Dollar is also receiving support from higher oil prices, with West Texas Intermediate (WTI) crude trading around $81.80 per barrel at the time of writing. Elevated tensions in the Middle East have led to concerns about supply disruptions, contributing to the price increase.